Comprehensive Annual Financial Report - St. Tammany Parish ...

levies as revenue in the period for which it was earned. In 2009, the Parish recorded
expenses for the St. Tammany Parish Library, STARC/Council on Aging and the St.
Tammany Parish Coroner as the amount actually remitted to the agencies for the revenue
recognized in 2008. In 2010, St. Tammany Parish has decided that it would better state
the Parish’s financial position as a whole to record both the accrued revenue and the
expenses related to the accrued revenue in the same fiscal year. Since this change was
implemented in 2010, expenses for these agencies show an increase from 2009.
Expenses increased for items funded by federal and state grants. These increases were
slightly offset by a decrease in expenses for Highways and Streets. This decrease is due
to many State Road projects, funded by the Parish, being completed prior to 2010.
The net effect of the following four components account for the increase in revenue:
• Operating grants increased by 72%, or $7,888,389.
• Capital grants and contributions decreased by 17%, or $2,660,945 mainly due to a
decrease in donated assets.
• Property tax increased by 9%, or $2,224,696.
• Investment earnings decreased 34%, or $1,401,386. This includes not only
interest earnings, but also the change in fair market value of investments held at
year end.
Business-type activities. Business-type activities decreased St. Tammany Parish’s net
assets by $646,894. Business-type activities changed tremendously from the prior year
due to the purchase of a large utility company in March of 2010. This acquisition added
approximately 8,200 water and 6,500 sewer customers to the previous less than 3,000
water and sewer customers of the Parish.
The variance between 2009 and 2010 resulted from primarily two things. First, transfers
in 2009 from governmental activities to business-type activities for the purchase of a
small utility company funded by general obligation bonds. Second, utility revenue bonds
were issued in 2010 to fund the purchase of the large utility company which resulted in
increased interest expense.
Transfers. The transfers from business-type activities to governmental activities were
the net effect of three items. First, debt payments were transferred from the Utility
Operations fund to the Debt Service fund for payments due on the bonds issued for the
purchase of the small utility company in 2009. Second, debt payments were transferred
from the Environmental Services fund to Utility Operations for payments due on Utility
Revenue bonds issued to improve the current sewer and water system.
Third, capital assets that have been funded through grants, but are now used by Utility
Operations or the St. Tammany Parish State Complex were transferred to the appropriate
enterprise fund. This should more accurately show the operational costs of the enterprise
funds since the depreciation expense will be recorded within the fund that the asset
operates.
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